Foreign buying of Metro homes plunged after new tax

Less than one per cent of Metro deals involved foreigners in August, down from 13.2 per cent in the previous six weeks

The number of Metro Vancouver homes sold to foreign buyers has plunged.

New numbers show a near-total collapse in the number of Metro Vancouver homes bought by foreign nationals in August after B.C.’s new 15 per cent foreign buyer tax kicked in.

Just 60 transactions with foreigners were recorded in Metro in August – 0.9 per cent of the total – down from 1,974 or 13.2 per cent in the previous seven weeks.

The new numbers were released Thursday by the finance ministry.

The value of foreign deals in Metro plunged from $2.3 billion for the seven weeks prior to the new tax taking effect to less than $47 million in August.

RELATED: B.C. urged to tighten scrutiny of foreign investors after spike in cash seized at YVR

Premier Christy Clark noted a huge surge of transactions were rushed through in late July – $850 million worth involving foreigners on July 29 alone – so they’d close before Aug. 2 and not be subject to the new tax.

“Lots of people moved their transactions into July from August because they wanted to avoid paying the tax,” Clark told reporters. “So I think we’ll start to see the numbers change a little bit in the coming months.”

Clark said the apparent dramatic effect of the tax was the goal of government in setting a rate for foreign buyers that some people argued was too high.

“That is the impact we wanted to have,” she said. “My hope is that many of those units that might have otherwise sold to foreign buyers will be open for British Columbians to buy, because we want to put British Columbians first.”

Clark also said she expected the tax would face a legal challenge. A Chinese student who was hit with an $80,000 foreign buyer tax bill on the Langley townhome she bought is leading a proposed class-action lawsuit on behalf of foreign buyers.

In the rest of the province outside Metro Vancouver – where the tax is not levied – there were 189 property transfers by foreigners, or 1.7 per cent of total transfers, worth $109 million. That was down from 3.6 per cent of the transfers in the rest of the province by foreigners prior to Aug. 2.

Foreign buyers made up 3.7 per cent of transactions in August in the Capital Regional District.

Finance Minister Mike de Jong has indicated the province would watch regions outside of Metro to gauge if the foreign buyer tax should be extended to additional areas.

Within Metro, foreign buyers made up 0.9 per cent of August transfers in Vancouver, 1.9 per cent in Richmond, 0.6 per cent in Surrey and 1.0 per cent in Burnaby – down sharply in each case from more than 24 per cent in Burnaby and Richmond before the tax took effect.

The amount of extra tax levied from foreign buyers in August was $2.5 million.

But finance ministry auditors are examining some transactions to see if they were structured to dodge the tax and whether reassessments are necessary. Suspect transactions include ones where a foreign buyer and a Canadian citizen or permanent resident were both included on title, with the extra tax only owed on the portion of the value claimed by the foreigner.

The province is also checking the citizenship of buyers who claimed to be tax-exempt Canadians or permanent residents and has vowed to audit any anomalies or cases where social insurance numbers don’t match.

The finance ministry has estimated it would generate $165 million a year in new revenue, which the province intends to use to fund new affordable housing initiatives.

Just Posted

UPDATED: Police call off search for body under Agassiz Rosedale Bridge

Swimmers reported discovering body two days ago

Garbage truck and van collide on 6 Ave.

No serious injuries in mid-day collision

A man around town: Trevor McDonald

If it’s musical or entertaining and in Chilliwack, Trevor McDonald’s probably had a hand in it

Dew worm races back at 2nd annual Ryder Lake Summer Fair

The Fair is back for the second year after a lengthy hiatus

Five calls on local highways, mountains for Hope rescue squad

Injured hikers, injured motorists and one casualty has Hope SAR team busy

Here’s what you need to know about Day 1 at the BC Games

All 18 events kick off on the track, riding ring, fields, courts and lake in the Cowichan Valley

Site C dam project plagued by problems: expert

E. Harvey Elwin expresses concern about internal BC Hydro and government documents

Former hockey scout with NHL Oilers hired as WHL Giants’ senior advisor

Hockey exec’s experience ‘a huge asset for us as we continue our pursuit of a championship,’ GM says

Sole Girls makes its move in Chilliwack

The youth organization is hosting its first day camp in Chilliwack

Seal attacks kayakers in the Broughton Archipelago

“It has to be one chance in a million of this happening.”

New trial for man who was given the wrong medical records

Accused built case on records sent from Surrey Pretrial that weren’t his, though he thought they were

Victoria-area park sign removed after glitch redirects to porn site

Resident looking to learn more about workout equipment discovered the problem code

Special Olympic athletes take on BC Games during special anniversary

Known as the Global Day of Inclusion, July 20 marks the first Special Olympics in 1968 in Chicago

Scammers dressed as Mounties threaten to arrest senior if she doesn’t cough up cash

Pair of fraudulent officers threaten to arrest 90-year-old woman

Most Read